The Michigan No-Fault Insurance reform is set to go into effect on July 2. While the reform was positioned as a cost savings for all auto insurance policy holders in Michigan, that might not actually be true for some drivers.

The new reform allows motorists the ability to select the amount of medical coverage they would like to buy with their auto policy, known as the personal injury protection (PIP). In addition to other options and changes, originally it was thought that at a minimum, drivers would save at least $120 per car with the new reform. However, it appears those savings may be negated by increases elsewhere in the policy.

At this date, there is not certainty around how auto insurance rates will be impacted good or bad, but some are starting to say that rates might go up for some drivers.  The Detroit Free Press recently published an article saying that some Detroiters could see higher car insurance rates under the reform. Keep in mind Detroiters already pay some of the highest rates in the country.

Whatever the case, it is critical you do your part to prepare for and respond to the new auto insurance reform. Here’s how you can do that.

Get Informed

The no-fault auto insurance law was created to help those involved in accidents and minimize the amount of cases that go to court. The rising costs of auto insurance has led to many driving without insurance coverage, resulting in the opposite outcome. This is a major driver behind the reform. 

Here’s some of the changes coming as a result of the new reform legislation:

  • Personal Injury Protection (PIP): New coverage limits will meet or exceed the highest benefits in the country while also allow driver the option to choose coverage options that fit their need/budget.
  • Premiums: Starting July 1, 2020, insurance agencies will need to reduce premiums from 10%-45% or more depending on the PIP option selected by the auto policyholder.
  • Fee Schedule: The reform will set a fee schedule that makes the payout of these charges much more manageable for auto insurance companies.
  • Michigan Catastrophic Claims Association (MCCA) Assessment: The reform will result in a lowering of per vehicle assessments starting July 2, 2020, with estimated savings of at least $120 per car and those with unlimited PIP medical coverage will not pay any assessment to the MCCA.

For more details around the reform, click here.

Review Your Policy

While the major change to the no-fault reform is related to the PIP coverage, it is critical that you understand your entire policy. While you might be able to find cost savings as a result of the reform, you run the risk of losing important coverage. The key to here is to understand what coverage you currently have, and work to find the best possible coverage at the lowest rate possible. 

Talk to Your Agent

As you look at your current policy and get familiar with the changes coming as a result of the no-fault reform, you should take time to speak with your agent in order to get an expert’s opinion on the matter. While the impact of the reform is still somewhat TBD at this time, your agent should have insight into what you can expect and what, if any, changes need to be made to your policy.

There’s a lot of uncertainty still associated with the reform, and your agent might not have all the answers at this time. However, you can at least have the discussion and make sure your positioned correctly for the reform. You can always adjust as more information is available about the reform.

Don’t Shop Rates…Yet

While you might see this major change as an opportunity to shop rates, the reality is insurance carriers are still working through their policies in order to comply with new regulations. It is important that you stay put until the reform kicks in. Once that happens and you and your agent are able to understand how it impacts your particular situation, then you can start to consider looking for better rates.

Ideally, you’ll already be working with an agent that can shop insurance carriers in order to find you the best rate. If not, you’ll definitely want to get a quote from an insurance broker who works with multiple carriers and can find you the best policy for you at the lowest rate.


While it isn’t clear exactly how the reform is set to impact drivers, it is critical you do everything you can to be prepared. Now’s the time to educate yourself not only on the policy reform, but on your current policies as well. Learn about what the new legislation is changing, review your existing policy and talk to your agent. Once the reform kicks in and you have more information on how your situation is impacted, then you can start to shop around to find the best possible rates.

If you have any questions, don’t hesitate to contact us today!